Future of solar industry in Massachusetts in hands of Beacon Hill

This solar installation in Adams could be affected by legislation under discussion in the state Legislature. Legislation addressing net metering caps is in limbo, stuck in the House/Senate Conference Committee, which met once on the day it was appointed — Nov. 18 — and has not met since.

This solar installation in Adams could be affected by legislation under discussion in the state Legislature. Legislation addressing net metering caps is in limbo, stuck in the House/Senate Conference Committee, which met once on the day it was appointed — Nov. 18 — and has not met since.

For the solar industry in Massachusetts, 2016 will be a turning point.

But depending on the outcome of pending legislation, that change could be good or bad for the fight against the effects of climate change and the growth of solar power in the commonwealth.

With the federal government having extended its subsidy for solar and wind development by five years, more are focusing on the Statehouse in its attempt to reach an agreement on its levels of subsidy for solar. Lawmakers wrapped up the formal fall 2015 session on Nov. 19 without passing legislation addressing net metering.

The House and Senate versions are now in the hands of the House/Senate Conference Committee, which met on the day it was appointed — Nov. 18 — and has not met since. The Nov. 18 meeting was hastily convened moments after the House and Senate appointed conferees. It lasted just 15 minutes, and an hour and a half later conference leaders announced that no deal would be struck before the Legislature began its weekslong winter recess. Conversations between the two conference committee chairmen, Rep. Thomas Golden, D-Lowell, and Sen. Benjamin B. Downing, D-Pittsfield, have been ongoing.

At issue are the caps on how much solar power can be sold back into the grid at the retail rate, a process known as net metering. The caps on net metering limit commercial and publicly funded large-scale solar projects.

Because the caps have been reached in the National Grid service areas of Massachusetts — which includes Stockbridge, Williamstown, most of Lenox, and 14 other Berkshire cities and towns — a number of these solar developments have stalled. Any proposed commercial or public solar projects in those communities wouldn't be permitted to move forward unless the caps are lifted.

That has resulted in an untold number of jobs and revenue streams in Western Massachusetts drying up because net metering is an essential part of the financial formula that promotes the development and use of solar-generated power.

More importantly, the quicker renewable energy expands, the faster planet-warming gases like carbon dioxide will be reduced, and the catastrophic consequences of climate change will be further blunted.

"We still have a long way to go [in fighting climate change], so the more we encourage the growth of solar, the faster we can get to a clean energy future," said Ben Hellerstein, state director of Environment Massachusetts. "But without lifting the caps, projects will continue to be stalled."

Stockbridge is among several communities seeking to build a solar array on closed landfills and other municipal property. Williamstown has both a town solar project and a private residential solar garden in the works, with Lenox pursuing installation of municipal solar panels on the town's capped landfill. The cap stands in the way of all these efforts.

Net metering caps do not apply to residential solar projects.

Utilities are pushing hard against raising the caps.

"We believe that the Legislature should adopt policies that are consistent with what low-income advocates and business organizations alike have advocated for, specifically no raise in the net metering cap, a more competitive system to determine pricing, a net metering reimbursement that reflects what all other renewables receive, and a rate-design policy that has everyone contributing a fair share to support the electric distribution system," said Mary-Leah Assad, spokeswoman for National Grid. "These policies are in existence in other states, with Massachusetts being the outlier having the most generous subsidies."

Assad said that among other things, solar projects require new equipment installation to be connected to the grid, which falls under the grid maintenance costs for National Grid. That cost is then passed on to consumers as required by public utility regulations.

But because solar generators are reimbursed at a retail rate, they don't carry part of the cost of grid maintenance, leaving the rest of the energy consumers to pick up that expense, she said.

"We are advocating limiting net metering as much as possible so costs to customers who don't have solar are lower," she said.

Assad maintains that even though caps have been hit, residential solar continues to grow, and some commercial solar projects will proceed at the higher cost of development.

"We continue to see interconnections at rates never seen before and continue to see lots of interconnection applications," she noted.

Clean energy advocates want the caps eliminated.

"The fact that so many of these larger projects are unable to move forward should be a real concern to anyone who supports renewable energy," Hellerstein said. "It's becoming more and more clear that we don't have any time to waste. We should be asking: How do we bring as much clean energy online as quickly as possible."

Legislation pending in the state House/Senate conference committee calls for temporarily raising the caps by 2 percent.

But a 2 percent increase in the caps would only last a few months before they're hit again. According to Hellerstein, that would only allow the projects already in the pipeline to proceed before the caps are hit again by mid-year, once again putting a damper on the growth of renewable energy in Massachusetts.

Downing, co-chairman of the Joint Committee on Telecommunications, Utilities and Energy, said the 2 percent increase wouldn't last long, but it would allow the solar sector to move forward while the Legislature attempts to reform energy policy in the Bay State, including the question of solar subsidies and how that fits into the overall energy future.

But first the House/Senate conference committee has to come to a compromise on the various aspects of solar new metering.

For example, the House bill also proposed a "minimum bill" that would be charged to solar power generators to help defray the cost of maintaining the power grid, although a specific monthly dollar figure has yet to be determined.

Another ongoing debate concerns the grandfathering of existing solar installations: Should existing projects be reimbursed for power pumped into the grid at the retail net metering rate for the life of the project, or should that rate be gradually reduced to the wholesale level, which the utilities pay to other sources of energy, such as coal-fired power plants?

"The hope is that we can stay on the same trajectory of growth in solar power," Downing said. "And I'd love to address net metering in the immediate future and move on to a broader debate on energy policy."

At issue is the rate at which net metering is reimbursed, Downing said. The Senate proposal has reimbursement at 17 cents per kilowatt hour. The House version proposes lowering that rate to the wholesale rate of 5 cents per kilowatt hour.

Four Berkshire County members of the House are strong supporters of net metering.

"We cannot wait any longer," said state Rep. William "Smitty" Pignatelli, D-Lenox. "Our inaction has shut down an entire industry in a state that is still in recovery. This is a sector of the economy that is critical to all of us."

"We want to get to a place where the solar and green industries don't go by the wayside," said state Rep. Paul Mark, D-Peru. "We should be encouraging solar growth and moving very quickly. This is a critically important topic for the county, the state, the nation and the world."

"I think there probably shouldn't even be a cap," said state Rep. Gailanne Cariddi, D-North Adams. "I think solar should be rolled out as quickly as the businesses and consumers want it rolled out. Massachusetts should move ahead with cleaning the environment and be at the top of the solar industry."

Rep. Tricia Farley-Bouvier, D-Pittsfield, said she hopes the conference committee comes up with a solution quickly.

"I especially want to be sure our small local solar companies are protected because it involves so many good local jobs," Farley-Bouvier said. "We should certainly raise the cap in support of solar, but we also have to look at the entire portfolio of renewable energy sources."

Downing said the three representatives and three senators in the Senate/House conference committee will be working during the coming weeks to come to an understanding. But he has no idea how long that could take, or what the final agreement will look like, if, indeed, an agreement is reached.

But if common ground cannot be found, he said, "we'll have to have this debate all over again. But I am hopeful. And I would point out that there is significant cost to inaction."

Contact Scott Stafford at 413-281-4622.

In 2015, 67 organizations spanning labor, business, environmental, community development groups and low-income housing organizations endorsed a vision for solar policy reform called the Next Generation Solar Policy Framework, which lays out a path to a self-sustaining solar industry that meets energy, environmental, and public health goals, continues success in creating jobs, and ensures all citizens have access to solar resources and healthier air.

The key elements of the framework are:

1. Suspend and then eliminate the caps on net metering, which undermine solar development without providing benefits to ratepayers.

2. Initiate an official, publicly scrutinized analysis of the benefits and costs of solar generation to ratepayers and society at large.

3. For certain categories of projects, align the value of net metering credits with the long-run value of solar generation to ratepayers, including any appropriate charges for use of the grid.

5. Grandfather existing solar projects under the policies in place when the projects qualified.

6. Set an ambitious long-term solar goal that contributes substantially to regional energy needs and environmental and public health requirements.

7. Expand current SREC II low-income provisions and create a new low-income and urban solar program to ensure that the benefits of solar are accessible to every resident of Massachusetts and provide employment and training in the clean energy sector.

The framework is endorsed by organizations such as the American Lung Association of the Northeast, Clean Water Action, Climate Action Business Association, Environment Massachusetts, HealthLink, International Brotherhood of Electrical Workers Local 103, Jewish Climate Action Network, Progressive Democrats of Massachusetts, Union of Concerned Scientists, and the Worcester Green Low Income Housing Coalition.

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